Red Bull enters cellphone market

Cape Town - On Thursday Red Bull and Cell C announced that the energy-drink company would be entering the cellphone market.

The industry has speculated that Red Bull was planning to operate a mobile virtual network. It would offer cellular services but use Cell C’s network rather than build its own.

Virgin is already operating a cellular phone service such as this in South Africa.

In its statement on Thursday Red Bull said it intended giving the cellphone industry “wings”.

But it did not elaborate, other than saying that “mobile connectivity” would be involved. Cell C declined to comment further.

Observers reckon that Red Bull would have to add significant value to its service to win over the South African market.

The company could use its fun-loving and sporting profile to attract consumers, as it sponsors various sporting events in South Africa every year.

According to Dobek Pater, an analyst at Africa Analysis, Red Bull might be satisfied with a smaller business and not wish to become a major player.

It would of course rely on brand loyalty, but it is difficult to say whether people who enjoy an energy drink would swap their cellphone networks.

Virgin Active always has people in its gyms, he said, but Virgin Mobile has never achieved the same popularity. And Cell C has gained only 13% to 15% of the market, despite having been in business for a decade.

The rest of the market is shared by Vodacom and MTN.

According to Pater, a mobile virtual network like Red Bull’s would have its own number series.

But the company owns neither a frequency licence nor its own towers.

Red Bull, an Austrian company, has previously launched similar services in its home country, as well as in Switzerland and Hungary, and these have enjoyed varying success.